Key elements of a freehold and/or leasehold residential/commercial property transaction. Investigation of a registered or an unregistered freehold and/or leasehold title

Question 1

Pre-contract phase -
Conveyance steps:

Answer 1

*Taking instructions from your client.
*Seller prepares the pre-contract package.
*Buyer approves the contract.
*Preparations for exchange.
*Exchange of contracts.

Question 2

Pre-contract phase -
Buyer’s solicitor:

Answer 2

*Interviews, AML checks, conflict of interest check, client care letter.
*Raise pre-contract searches AND enquiries, commission survey, investigate title.
*Amend contract AND approve contract.
*Check searches, arrange mortgage, agree deposit arrangements, prepare pre-exchange report to client.
*Sign and exchange contracts AND pay deposit.

Question 3

Pre-contract phase -
Seller’s solicitor:

Answer 3

*Interviews, AML checks, conflict of interest check, client care letter.
*Seller checks title AND produces evidence of title, drafts contract, assembles package of pre-contract documents.
*Draft contract AND answer requisition on contract.
*Agree deposit arrangements.
*Sign AND exchange contracts.

Question 4

Post-contract/pre-completion phase - Transfer of deed:

Answer 4

*Buyer’s solicitor drafts transfer deed.
*Seller’s solicitor approves the transfer deed.

Question 5

Post-contract/pre-completion phase - Preparing for completion:

Answer 5

*Buyer’s solicitor sends the client completion statement.
*Complete and update final searches.
*Submit report on title/certificate of title to lender.
*Seller’s solicitor sends the client completion statement.
*Reply to buyer’s pre-completion enquiries.

Question 6

Post-contract/pre-completion phase - Completion:

Answer 6

*Buyer’s solicitor agrees time, place, AND method of completion.
*Pay balance of purchase price.
*Seller’s solicitor agrees time, place, AND method of completion.

Question 7

Post-completion phase -
Post-completion:

Answer 7

*Buyer’s solicitor completes mortgage deed, pay SDLT (England) OR LTT (Wales).
*Register transfer of title at HMLR
*Seller’s solicitor releases the keys.
*Redeem any mortgage.

Question 8

Process of analysing land registry official copy entries (registered land):

Answer 8

Official copies of title AND plan for the property are available from HM Land Registry (HMLR).
Seller should supply the buyer with Official Copies (NOT less than 6 months old).

Question 9

The official copies will show entries on three registers:

Answer 9

Property register
The Proprietorship register
The Charges register

Question 10

Property register:

Answer 10

descriptions of the land by reference to the postal address,
title plan AND indicate if freehold OR leasehold.

Question 11

The Proprietorship Register – current owners, address for service, AND the class of title which can be:

Answer 11

*Absolute title – strongest AND most common title.
Title is subject to entries on the register, unregistered interests (overriding interests), within schedules 1 and 3 of the LRA 2002.
Where the proprietor is a trustee, minor interests of which they have notice
Example (interests of the beneficiaries under a trust).
*Possessory title – where the person is in possession of the land BUT they have lost the title deeds
OR are claiming through adverse possession.
Proprietor is subject to all adverse interests existing at the date of first registration.
*Qualified title – where there is a specific identified defect which CAN’T be overlooked with the grant absolute title.
*Good leasehold title – freehold is unregistered, the registrar ONLY guarantee the lease to the extent that there are no defects in the freehold title
AND the grantor acted within his rights in granting the lease.

Question 12

The Charges Register – identifies encumbrances such as:

Answer 12

*Covenants
*Easements
*Charges OR mortgages
*Leases
*Notices

Question 13

Process of analysing an epitome of title and deducing ownership (unregistered land):

Answer 13

Seller’s solicitor MUST select a document that will be the good root of title to the property,
to prove to the buyer, he has the right to sell.

Question 14

Seller will deduce title, normally by preparing?

Answer 14

an epitome of title, schedule of all documents of title
AND with copies of the documents listed in the epitome
(conveyances, assents, mortgages, AND plans) which are numbered, listed, AND identified.

Question 15

The epitome of title MUST establish?

Answer 15

a root of title.

Question 16

Land to be registered at the HMLR with?

Answer 16

title absolute, good root of title AND an unbroken chain of ownership are required.

Question 17

Seller is required to give evidence of title, starting with?

Answer 17

a good root of title, that is at least 15 years old
(s.44, LPA 1925).

Question 18

Good root of title (document MUST satisfy each of the following requirements):

Answer 18

*MUST deal with OR show the ownership of the whole legal AND equitable interest in the land in question.
*MUST contain a recognisable description of the property.
*MUST not contain anything that casts any doubt on the title.

Question 19

Examples of a good root of title include:

Answer 19

*Either a conveyance on sale,
OR legal mortgage (at least 15 years old).
OR
*Voluntary assent OR conveyance made after 1925.
AND
*MUST be at the start of a chain which is uninterrupted up to the present day.

Question 20

Epitome of title starts with the document which is good root of title
AND?

Answer 20

continues with every document affecting ownership up to the document,
that directly gives title to the seller (demonstrating an unbroken chain of ownership).

Question 21

The following documents MUST be included in the epitome (if they exist):

Answer 21

*Conveyance (sale OR gift).
*Leases
*Surrendered leases
*Legal mortgages AND discharge of legal mortgages.
*Evidence of devolutions on death (grants of representation, assents).
*Changes of name of estate owners.
*Documents pre-dating the root of title which contain details of restrictive covenants affecting the property.
*Memoranda endorsed on documents of title (e.g., recording a sale of part).
*Powers of attorney under which any document of title has been executed.

Question 22

Solicitor will review the documents attached to?

Answer 22

the epitome.

Question 23

Solicitor will conduct:

Answer 23

Index Map Search (Form SIM)
Central Land Charges Register Search (Form K15)

Question 24

Index Map Search (Form SIM):

Answer 24

search against the property to show if the property is registered,
subject to a pending first registration application
OR subject to a caution against registration.

Question 25

Central Land Charges Register Search (Form K15):

Answer 25

search against current OR previous estate owners (period they owned the land) to see if ANY equitable interests protected by registration as a Land Charge.
Can reveal the following:
Estate contract (C4)
Restrictive covenant (D2)
Equitable easement (D3)
Home right (F).

Question 26

Summary for reviewing official copy entries (registered land) -
Property register:

Answer 26

Description of the property on register matches contract description.
Title number corresponds to that on the contract.
Freehold OR leasehold description matches the contract.
Any land has been removed from the title AND if this is reflected in the contract.

Question 27

Summary for reviewing official copy entries (registered land) -
Charges register:

Answer 27

Check if there are any encumbrances (leases that AREN’T overriding interests, mortgages, AND restrictive covenants).
Which if any, of these encumbrances will be removed OR discharged on completion?

Question 28

Summary for reviewing official copy entries (registered land) - Proprietorship Register:

Answer 28

Check class of title corresponds with contract.
Check the seller is registered proprietor.

Question 29

Summary for reviewing official copy entries (registered land) -
Title plan:

Answer 29

Ensure the contract land matches the title plan.
Any part of the contract land that is NOT registered OR is registered under a different title number?
Any part of the land shown on the title plan which is NOT included in the contract land.
Any colouring OR hatching on the plan, can indicate rights of way OR other interests.

Question 30

Summary for reviewing each document in epitome of title -
Chain of ownership:

Answer 30

There is an unbroken chain of ownership up to the present seller WITH supporting documents.

Question 31

Summary for reviewing each document in epitome of title - Description of land:

Answer 31

Description of property (and within plans) is consistent throughout epitome.

Question 32

Summary for reviewing each document in epitome of title -
Stamp Duties & Document Execution:

Answer 32

Correct amount of stamp duty paid on prior documents.
All prior documents properly executed.

Question 33

Summary for reviewing each document in epitome of title - Encumbrances, Land Charges Search, Index Map Search:

Answer 33

Review for easements AND covenants.
Make Land Charges & Index Map searches as part of title investigation.

Question 34

Issues that could arise from an investigation of title AND further action required -
Easements:

Answer 34

Check easements ARE sufficient over adjoining land (e.g., right of way OR right of drainage)
for the full enjoyment of land being acquired.

Question 35

Easements will appear on the Charges OR Property register (registered land)
OR in the conveyance (unregistered land) AND?

Answer 35

should be brought to the client’s attention, particularly IF they have an obligation to contribute to the cost of maintenance
OR restricted hours of use.

Question 36

Issues that could arise from an investigation of title AND further action required -
Mines and mineral reservations:

Answer 36

Any mines AND mineral rights reserved on the sale of the land will be noted in the Property register (registered land)
OR in the conveyance (unregistered land)
AND WILL NOT BE sold to the buyer of the land as they are excluded.

Question 37

Index Map Search (Form SIM) – mines AND minerals are registered under a separate title AND?

Answer 37

show who is the owner of those mines AND minerals.

Question 38

Issues that could arise from an investigation of title AND further action required -
Declarations as to rights and air:

Answer 38

Any reservation of a right to light OR air over adjoining land which CAN restrict OR affect the enjoyment OR use of the land SHOULD be brought to the buyer’s attention.

Question 39

Issues that could arise from an investigation of title AND further action required -
Co-ownership:

Answer 39

Co-owned property CAN be held as joint tenants,
OR tenants in common (indicated by a restriction on the Proprietorship register in registered land).
Joint tenants interest will be subject to a right of survivorship.
Tenants in common will hold in equal OR unequal shares, the right of survivorship DOESN’T apply
AND their equitable interest will pass under the will OR intestacy.
Purchasing land from co-owners, solicitor SHOULD check how the land is held,
any co-owners passed away,
how the interest has passed to the survivor
AND that they have the sole power to dispose of the land,
OR if it is necessary to appoint a second trustee to ensure the trust for land is overreached.

Question 40

Issues that could arise from an investigation of title AND further action required -
Covenants:

Answer 40

Buyer will NEED to be aware of any covenants that affect the land as they CAN stop his intended use of the land
OR be necessary to benefit the land:
Restricted covenants – prevents the land being used in a certain way.
Registered land, found in the Charges Register.
Unregistered land, found in the Conveyance AND be binding IF registered as a class D2 Land Charge.

Positive covenants – registered land, Charges register CAN have an obligation to carry out financial expenditure
OR carry out works.
Unregistered land, found in the conveyance.
Positive covenants DON’T run with the land BUT are often supported by indemnity covenants
which form a chain of indemnity.

Question 41

Original covenanter sued for breach (by original covenantee) the chain of indemnity:

Answer 41

sue their buyer, who can then sue their buyer(s).

Question 42

Issues that could arise from an investigation of title AND further action required -
Mortgages:

Answer 42

Any existing mortgages MUST be noted AND discharged at completion to take free of the lender’s interest.

Question 43

Registered land, found in the Charges Register with a restriction on disposing of the property WITHOUT?

Answer 43

consent of the lender in the Proprietorship register.

Question 44

Unregistered land, found in the epitome of title as?

Answer 44

one of the title documents listed in schedule 1.

Question 45

Issues that could arise from an investigation of title AND further action required -
Leases:

Answer 45

Any leases revealed to the solicitor SHOULD be disclosed to the buyer to check its existence is known AND compatible with the intended use of the property.

Question 46

Registered land, lease of more than 7 years registered AND?

Answer 46

appear in the Charges Register, binding the buyer.

Question 47

Lease for less than 7 years AND equitable leases are enforceable as?

Answer 47

overriding interests where the tenant is in actual occupation.

Question 48

Unregistered land, legal lease WILL be documented in?

Answer 48

a deed AND form part of the epitome of title documents.

Question 49

Issues that could arise from an investigation of title AND further action required -
Notices:

Answer 49

Notice in respect of a registered estate OR charge protects an interest (e.g., restrictive covenant) in registered land
where an interest is intended to bind a person who acquires the land.

Question 50

Notice protects the priority of interest AGAINST?

Answer 50

any subsequent interests.

Question 51

Notice CAN be agreed with the proprietor’s consent OR?

Answer 51

unilateral without consent.

Question 52

Issues that could arise from an investigation of title AND further action required -
Home rights:

Answer 52

Family Law Act 1996 – gives statutory rights of occupation to the non-owning spouse OR civil partner (NOT co-habitees).
Home rights bind a purchase for value IF registered.

Question 53

Registered land, registered as?

Answer 53

a class F land charge in the name of the estate owner.

Question 54

Home rights CAN’T be overreached
AND MUST?

Answer 54

be waived by the non-owning spouse OR civil partner.

Question 55

These rights MUST be agreed to be removed BEFORE?

Answer 55

exchange of contracts with the spouse OR civil partner’s solicitor)
AND their removal will be a condition of the contract before completion.

Question 56

Purpose and process of reporting to a client:

Answer 56

Title investigation AND associate issues for both registered AND unregistered land SHOULD BE reported to
AND discussed with the client, with the client confirming instructions where necessary in response to issues raised.

Question 57

Generally, when investigating title, the following should be reported to the client:

Answer 57

Any issues revealed in the title investigation OR a defect in the title.

Question 58

Any issue that NEEDS to be clarified with?

Answer 58

the seller’s solicitors.
IF so, raise additional enquiries to the seller.

Question 59

Any matters have arisen that NEED to be dealt with in the contract such as?

Answer 59

provision for encumbrances to be released
OR identifying the chattels included in the sale.

Question 60

Title reveals ANY OTHER major concerns,
example, anything that MIGHT prevent the buyer’s proposed use of the property.
Such matters SHOULD?

Answer 60

be reported to the buyer AND any lender immediately.

Question 61

First registration of unregistered land is compulsory when one of the following occurs:

Answer 61

Freehold conveyance
Lease – granted for more than 7 years.
Lease assignment – more than 7 years to run.
Assent/vesting assent – freehold
Assent/vesting assent – lease with more than 7 years to run.
First legal mortgage – freehold
First legal mortgage – lease with more than 7 years to run.
Reversionary leases taking effect more than 3 months AFTER grant.
Partitioning of land between trustees – freehold/lease with more than 7 years to run.
Appointment of trustee by deed – freehold/lease with more than 7 years to run.